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Corn, soybeans down on rain in South America

Soybeans were lower on speculative and technical selling. Rain was better than expected over the weekend in Argentina and southern Brazil with more in the forecast. That doesn’t necessarily mean a full pattern shift is in the works, but that wetter pattern is expected to persist into February. Early harvest activity is underway in parts of Brazil. Unknown destinations bought 192,000 tons of 2022/23 U.S. soybeans. That’s usually a sale to China, but might be another destination due to this week’s Lunar New Year celebrations. U.S. soybean export inspections were more than what’s needed to meet projections at 1.8 million tons. That’s down on the week, up on the year, and primarily to China and Germany. Soybean meal was lower and bean oil was firm on the adjustment of product spreads. Domestic crush margins have narrowed but remain in positive territory.

Corn was lower on speculative and technical selling. Corn is watching weather in South America, with forecasts calling for improved rainfall into early next month. It’s too late for part of the crop, but drought did delay planting in portions of Argentina and southern Brazil, so there will be some benefit. Export demand for U.S. corn is slow, but the window should be opening wider in the coming weeks as Brazil exhausts old crop and first crop supplies and Ukraine continues to monitor uncertainties about old crop harvest and storage, new crop planting, and exports. Brazil’s second crop won’t be available until this summer. U.S. corn export inspections last week were under both the prior week and a year ago, with Mexico and Japan topping the list. The USDA’s next round of supply and demand numbers is out February 8th.

The wheat complex was sharply lower on fund and technical selling, along with a higher move in the dollar. Most forecasts have another round of winter weather in the Plains, recharging soil moisture ahead of hard red winter emerging from dormancy in a few months. The drought in that region has not ended, but every little bit helps. There’s also at least some precipitation in the forecast for dry portions of the soft red winter crop. Export demand for U.S. wheat remains slow due to Russian control of the market. Ukraine is still exporting grain with less than two months remaining in this version of the Black Sea Grain Initiative, even as Russia reportedly continues to slow down inspections of vessels set to leave the region. U.S. export inspections were above a week ago, but below a year ago, mainly to South Korea and Mexico.

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